The Death of Celsion?

The biotech sector is full of companies which will have great wins and horrible flops. The latter is the case today for Celsion (NASDAQ: CLSN). In fact, if you just look at the stock drop of 80% or so, anyone sitting on the sidelines would easily be able to predict that Celsion has some serious viability concerns ahead of it. This cancer drug candidate developer faces a serious implosion risk.

The company’s study which was evaluating ThermoDox and radiofrequency ablation did not meet the primary endpoint of improving progression-free survival by at least 33% over the placebo in patients with hepatocellular carcinoma (primary liver cancer). Unfortunately, the secondary endpoints do not look that promising. After reviewing comments after the conference call, Celsion has done nothing to give existing investors much hope.

By our take, Celsion has not even managed to give much hope to new prospective investors who would be bottom fishers with this stock down so much. This looks like a case where investors fear that bottom fishing will end up about the same as bottom sniffing. The problem is that Celsion’s other trials are still quite a way out from getting closer to any FDA decision. Here is the pipeline image for ThermoDox.

After an 81% drop to $1.48 so far on Thursday and an $8.02 close on Wednesday, the prior 52-week range was $1.63 to $9.44. The market cap is now only about $52 million.

Before factoring in any new financing and factoring in the effects of any shareholder class action lawsuits, the September balance sheet showed that Celsion had only about $22.5 million in cash and short-term investments with long-term debt of $4.14 million and total liabilities of $12.385 million. Yahoo! Finance showed its net tangible assets at just under $13 million.

We would note that Celsion does have very active stock options. At least it did before this news. Celsion looks like an unlikely candidate for a quick recovery here. Its viability concerns are real.